ERP Implementation Failures?

A lot of large corporates may have already heard of success stories and testimonials of ERP softwares and implementations.

But we feel that it is a push-factor, and that there are even stronger pull-factors which may pull the implementation into failure, which are primarily important for small and medium enterprises to first necessarily learn about.

This is not about our own failures, but some stories we have heard from the mass or from our dear customers about previous experiences on failed attempts to implement ERP system before they have reached for our helping hands.

We have digested most of these unfortunate experiences from other people, and have come up with the following top ten most critical pull-factors towards ERP implementation failure.

Top ten most critical pull-factors towards ERP implementation failure

Failing to identify and solve real business problems

A lot of people may tell you that a system can

automate some of your tasks

minimize overlapping or repetitive tasks

centralize information and data

provide accurate and quick calculations

The above are common expectations most people have when they discuss about ERP.

However, most of them fail to actually identify real, actual business problems before choosing a system. And even if they do succeed in finding problems, some of them still fail to devise a logical, efficient and effective solution and resolve the problems.

Failing to choose and fully utilize the right tools for problem-solving

Failing to realize the above only leads to your first wrong decision: choosing a product which actually does not solve your business problems. For instance, we believe that there is no such thing as a canned-product which can solve all your business problems.

Some people may choose canned-products for various reasons, but the main reason we observe is to fulfill an immediate need in some minor tasks.

Therefore, it is mainly the lack of an overview on the entire corporate business process.

As a result, you may be led to possess scattered data across different and scattered systems, and you may face difficulties in integrating these systems, and ultimately face the problem of chaotic and innefficient transfer of information and unwise decision-making.

Failing to set expectations, make commitments and to change

Some corporate unreasonably expect that there might be some miracle software that automatically cuts down your costs and boosts your profits.

The brutal truth is your competitors are continuously improving. Reasonable expectations, requires change to create the conditions for success, and the commitment and action to change.

When we solve business problems, we consider both the business hardware and the business software.

Business hardware may include your capital and major physical resources.

Business software does not only include computer software. Business software also includes:

determination and direction

technical know-how and methodologies

skilled, well-prepared and upgradable staff

Corporates need to realize that they too also need to have expectations upon themselves, to make and fulfill their commitments, to adjust and to continuously improve, in order to survive fierce competition.

Failing to apply business process research, analysis and methodologies

This is usually obvious at the top level or management level of corporations, and requires an open mind to discover their existence.

Failing to unify varying opinions and to finalize decisions

This is usually obvious at the management level of corporations, and requires teamwork to discover their existence.

This is usually obvious at the micro or unit level of corporations, and requires micro-management to discover their existence.

Failing to set goals, to plan, coordinate, to take action and execute

This is usually obvious when management level and employees sit down and start discussing, and requires a common vision to resolve differences.

Failing to identify and delegate responsibilities, and to cooperate

This is usually and unfortunately NOT obvious at the beginning stages of implementation, and requires experience on system development and implementation to avoid these pitfalls.

Failing to cooperate may exist in many occasions, such as:

failing to assign capable people onto various aspects of the entire implementation project

failing to disclose or share critical information, opinions or decisions during the system design and development stages

failing to stick to the plan and creating an overload of running changes

failing to insist on standardized methodologies and correct practices

Failing to learn, to meet qualifications and to apply knowledge and know-how

If any task within the business process does not require qualifications, then anyone can do the job. To use a metaphor, the most powerful racing car will still not win any race without a skillful driver. The same concept applies when you use any information system.

Teaching and learning is a two-way process, and we not only train, but also eventually assess the final abilities of trainees.

Failing to continuously improve and to identify and eliminate wastes

If you view the entire business process at the micro level, you can realize that any stage of any process can be a possible waste. For example:

wastes in resources and their allocations

wastes in design time, preparation, processing and waiting time

wastes in space, inventory, materials and supplies

wastes in administration, personnel and organizational layers

wastes in additional, unnecessary processings and excessive costs

wastes in creating safety nets

It is even most often that after a decision is made and executed, if the aftermaths are left alone and unmanaged, wastes start to accumulate.